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be at liberty to go in and be examined lying upon defendants' representations pro interesse suo,and that inquiry might that they had an ample capital, umimbe made what interest they had in the paired. At the expiration of the credit goods, chattels, debts, credits, rents and defendants sought an extension, and ofprofits mentioned in the order of the fered their notes at thirty, sixty, and 29th of July. ninety days, renewing their representations as to unimpaired capital. On the strength of these representations plaintiffs gave the extension and took the notes The first note was paid. but before the maturity of the second, plaintiffs received notice to attend a meeting of defendants' creditors at which they were offered forty cents in composition of the indebtedness.

Held, For the purpose of taking possession and protecting the business against creditors generally, I think the receiver was in possession, and it was wrong to disturb him; and when the sherif' was informed of the appointment on the 5th of August he ought to have been withdrawn.

I am of opinion that when an individual is named in the order he is entitled to possession as from the date of the order, and is the officer of the court from that time.

Plaintiffs declined the offer and brought immediate suit, and obtained an order for defendants' arrest, because of fraud. On the trial the the two reI consider Mason as being in posses- maining notes were surrendered up for sion from the date of his appointinent, cancellation, and the papers on which and the case of the execution creditors the order of arrest had been granted consequently fails, and, as they might were put in evidence. Plaintiff's then have come to the court instead of tak- offered to show that the notes had been ing out the interpleader summons, they taken upon fraudulent representations. must pay the costs. as to defendants' solvency, but the offer was refused on the ground that there was no allegation of fraud in the complaint. Complaint was dismissed except as to amount of certain goods sold after the notes were given. On appeal.

Opinion by Malins, V. C.

TERMINATING CREDIT. COM

PLAINT.

GEN'L TERM. SUPREME COURT, FIRST
DEPT.

Claflin et al, applts. v. Taussig et al, respts.

Decided March 31, 1876. Where sale is influenced by fraudulent representations, even though on credit, it is unnecessary to allege fraud in complaint. Seller may terminate the credit and sue on the debt at once.

Wm. T. McRae for applts.
Blumenstiel & Archer for respts.

Held, That the ruling thus made was erroneous, The agreement to extend credit, like any other agreement could when presented as a defence, be

assailed for fraud.

Plaintiffs were not bound to anticipate the answer that the notes were not

Appeal from judgment rendered at due, by averring that they were acceptcircuit. During the years 1873 & '74, plaintiffs sold goods to defendants on credit, re

ed by reason of fraudulent representations. It it is well settled that, when a sale is influenced by fraudulent rep

resentations, even if marked by a cred- United States for the Northern Disit which has not expired, it is unnecessary to allege fraud in the complaint (27 Barb., 652; 34 id., 89; 32 id., 322; 4 Keyes, 120). The presence of that element destroys the credit at the op tion of the seller, makes the debt due immediately if he so elect, and enables) him to sue at once for its recovery upon an allegation of goods sold and delivered.

And when the defense disclosed the agreement to extend, plaintiff's were not bound by the rules of pleading to give notice that they would assail it on the trial.

It was the defendants' business to be prepared to sustain the agreement, if necessary, by evidence showing its binding force.

Judgment reversed and new

trial

ordered.

Opinion by Brady, J.; Davis, P. J., and Daniels, J. concurring.

INJUNCTION AGAINST

COL

LECTION OF TAXES. EQUITY
TAXATION. CORPORATION.
U. S. SUPREME COURT.

Isaac Taylor, Collector of Peoria county, et al., applts., v. James F. Secor and William Tracy, respts.

Decided April 24, 1876. Neither illegality or irregularity in the proceedings, nor error, or excess in the valuation, nor the hardship or injustice of the law, provided it be constitutional, nor any grievance which can be remedied by a suit at law, either before or after its payment, will authorize an injunction re straining the collection of a tax. The rule as to courts of equity interfering with the collection of taxes stated and applied to a peculiar case. Appeal from the Circuit Court of the

trict of Illinois.

This was a bill in equity seeking to restrain the collection of certain taxes upon the ground of illegality, erroneous assessments, inequity, and that the law was unconstitutional.

The act of the legislature of Illinois of March 30, 1872, under which the taxes complained of were assessed, makes special provisions for the taxation of railroads and other corporations, the main feature of which is the purpose of leaving to each county, city, and town the power of assessing for taxation what is properly local in the same manner that other similar property is taxed in that municipality, and at the same time to subject to like taxation on some fair basis that which is not in its nature so clearly local, but which, by reason of its being appurtenant or incilent to the railroad, should pay its share to the state, and to all the counties, towns, and cities through which any part of the road runs. The theory of the system is manifestly to treat the railroad track, its rolling stock, its franchise, and its capital as a unit for taxation, and to distribute the assessed value of this unit according as the length of the road in each county, city, and town bears to the whole length of the road.

It provides, therefore, for three separate valuations :

1. Of the real estate in each county, city, and town, which is not a part of the track and right of way, and of the personal property, such as tools, implements, &c., which remain permanently at that locality. These are valued by the local assessor and taxed by the local authorities in precisely the same manner that other real and personal property are assessed and taxed.

2. The railroad track, including the the aggregate capital of the company. This is obvious from the proviso to the fourth paragraph of section three of the revenue law. As this paragraph lies at the basis of these controversies, it is here given verbatim:

right of way, the grading and superstructure, and such depots, buildings, and other improvements as are on it, and all the rolling stock and other personal property not local.

These two subjects of assessment are by the statute called the tangible property of the company.

The entire value of this, owned by "The capital stock of all companies any company in the state, is ascertained and associations now or hereafter creaby a report made by the proper officer ted under the laws of this state, shall be of the railroad company, submitted to so valued by the state board of equalia state board of equalization, which zation as to ascertain and determine, refixes this value finally, and each county, spectively, the fair cash value of such city, and town taxes the company on so capital stock, including the franchise, much of this assessment as the length over and above assessed value of the of the track within that locality bears tangible property of such company or to the whole length of the track asses-association. Said board shall adopt sed by the board. such rules and principles for ascertaining the fair cash value of such capital stock as to it may seem equitable and just; and such rules and principles It is obvious, however, that while a when so adopted, if not inconsistent fair assessment under these two descrip- with this act, shall be as binding and of tions of property will include all the the same effect as if contained in this visible or tangible property of the cor-act-subject, however, to such change, poration, it may or may not include all alteration, or amendment as may be its wealth. There may be other prop- found, from time to time, to be neceserty of a class not visible or tangible sary, by said board: Provided, that in which ought to respond to taxation, and all cases where the tangible property or which the state has a right to subject to capital stock of any company or association is assessed under this act, the 3. This element the State of Illinois shares of capital stock of any such calls the value of the franchise and company or association shall not be ascapital stock of the corporations. The sessed or taxed in this state. This value of the right to use this tangible clause shall not apply to the capital property in a special manner for pur- stock or shares of capital stock of banks poses of gain. And this constitutes the organized under the general banking third valuation, which is likewise to be laws of this state." made by the board of equalization, and which, when thus ascertained, is subjected to the taxation of the state, and "First. The market or fair cash the counties, towns, and cities, by the value of the shares of capital stock same rule that the value of the road-bed and the market or fair cash value of is, namely, according to the length of the debt (excluding from such debt the track in each taxing locality. The the indebtedness for current exword capital stock, as here used, does penses) shall be combined or added to not mean the shares of the stock, but gether; and the aggregate amount so

taxation.

The rule adopted by the board is as follows:

tions.

stock, including the franchise, respect- ferries, insurance, telegraph and exively, of such companies and associa press interests or business, venders of patents, and persons or corporations "Second. From the aggregate amount owning or using franchises and priviascertained as aforesaid, there shall be leges, in such manner as it shall, from deducted the aggregate amount of the time to time, direct by general law, equalized or assessed valuation of all the uniform as to the class upon which it tangible property, respectively, of such operates." companies and associations, (such equal- 10. The general assembly shall not ized or assessed valuation being taken impose taxes upon municipal corporain each case, as the same may be tions, or the inhabitants or property determined by the equalization or asses- for corporate purposes, but shall require ment of property by this board), and that all taxable property within the the amount remaining, in each case, if limits of municipal corporations shall any, shall be taken and held to be the be taxed for the payment of debts conamount and fair cash value of the cap- tracted under the authority of law, such ital stock, including the franchise, which taxes to be uniform in respect to persons this board is required by law to assess, and property within the jurisdiction of respectively, against companies and as- the body imposing the same."

sociations now or hereafter created under the laws of this state."

It is said that the statute of Illinois is void, because it violates the principle of uniformity, and taxes corporations in a manner different from that which governs taxation of individuals.

The sections of the constitution relied on in support of this proposition, are sections one and ten of article nine, which are as follows:

1. The general assemby shall provide such revenue as may be needful by levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to the va.ue of his, her, or its property; such value to be ascertained by some person or persons, to be elected or appointed in such manner as the general assembly shall direct, and not otherwise; but the general assembly shall have power to tax peddlers, auctioneers, brokers, hawkers, merchants, commission merchants, showmer, jugglers, inn-keepers, grocery-keepers, liquor dealers, toll-bridges,

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As regards this latter section there is no claim that the rate of taxation levied by any municipal corporation, on the assessed value of railroad property within its limits, is greater than on other property.

Nor is it asserted that the valuation. of that part of the property which the statute regards as strictly local, namely, real estate not a part of the track, and tools and implements used exclusively within the locality, has been assessed on any other principle than that which is applied to the property of individuals.

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ish to the state auditor a schedule of final, can be granted to stay collection. the various elements already mentioned of taxes until it is shown that all the as necessary in applying the statutory taxes conceded to be due, or which the rule of valuation. It is charged that court can see ought to be paid, or which the board of equalization increased the can be shown to be due by affidavits, estimates of value so reported to the has been paid or tendered without deauditor, without notice to the com- manding a receipt in full. panies, and without sufficient notice. that it ought to be done, and it is strenuously urged that for want of this notice the whole assessment of the property and levy of taxes is void.

5. While the constitution of Illinois requires taxation, in general, to be uniform and equal, it declares, in express terms, that a large class of persons engaged in special pursuits, among whom Held, 1. While this court does not are persons or corporations owning lay down any absolute rule limiting the franchises and privileges, may be taxed powers of a court of equity in restrain- as the legislature shail determine, by a ing the collection of taxes, it declares general law, uniform as to the class that it is essential that every case be upon which it operates, and under this brought within some of the recognized provision a statute is not unconstiturules of equity jurisdiction, and that tional which prescribes a different rule of taxation for railroad companies from neither illegality or irregularity in the that for individuals. proceedings, nor error or excess in the valuation, nor the hardship or the injustice of the law, provided it be constitutional, nor any grievance which can be remedied by a suit at law, either before or after the payment of the tax, will authorize an injunction against its

6. Nor does it violate any provision of the constitution of the United States.

7 The capital stock, franchises, and all the real and personal property of corporations are justly liable to taxation, and a rule which ascertains the value of all this by ascertaining the cash value of the funded debt and of the shares of the capital stock as the basis of the assessment, is probably as fair as any other.

collection.

2. This rule is founded on the principle that the levy of taxes is a legislative and not a judicial function, and the court can neither make nor cause to be 8. Deducting from this the assessed made a new assessment if the one com- value of all the tangible real and perplained of be erroneous, and also in the sonal property which is also taxed, necessity that the taxes, without which leaves the real value of the capital the state could not exist, should be reg-stock and franchise subject to taxation ularly and promptly paid into its treas- as justly as any other manner, all modes being more or less imperfect.

9. It is neither in conflict with the constitution of Illinois nor inequitable that the entire taxable property of the railroad company should be ascertained by the state board of equalization, and that the state, county, and city taxes

4. No injunction, preliminary or should be collected within each munici

ury.

3. Quære: Whether the same rigid rule against equitable relief would apply to taxes levied solely by municipal corporations for corporate purposes as that here applied to state taxes? Probably not.

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